A bug in the rebasing function caused YAM Finance to lose control of on-chain governance.
This is what was revealed on the project’s official blog, where it is explained that the bug has allowed the generation of excess reserves, making it impossible to take any future governance action.
The bug was in the code and was a writing error of the function that manages the total supply.
The problem does not concern the funds held by users, or the resources locked in staking smart contracts, but only governance.
Because of this bug, about $500,000 of yCRV was added to YAM reserves, and although the problem could have been fixed by the community before the next rebase, scheduled for this morning, this did not happen.
Yam Finance, goodbye governance and goodbye value
The co-founder of Yam Finance, Brock Elmore, tweeted:
“I’m sorry everyone. I’ve failed. Thank you for the insane support today. I’m sick with grief”.
i’m sorry everyone. i’ve failed. thank you for the insane support today. i’m sick with grief
— belmore🍠 (@brockjelmore) August 13, 2020
So although the bug was discovered in time, it was not possible to apply the necessary corrective actions to resolve it before it became final.
So now the project has completely and definitively lost on-chain governance.
It is not uncommon for a project that has grown so quickly, and landed so quickly on the markets, to have bugs in the code, but these are usually corrected during the early stages of deployment.
In this case, however, the significant sudden growth has not made it possible to intervene to solve the problem after it was identified.
The YAM token, which was worth around $150 yesterday, dropped almost instantly to $13, losing more than 91% of its value in just a few minutes.
Then the collapse continued until it reached $2.6, a loss of more than 98% from yesterday’s high of $164.